UK Economy Defies Expectations Amidst £3 Trillion National Debt
Chancellor Healey backs infrastructure and defence spending as growth outpaces predictions despite fiscal challenges.
Sarah Connor
The UK's national debt stands at approximately £3 trillion.
First-quarter growth hit 0.6%, with the second quarter adding 0.5%. Third-quarter estimates project growth between 0.6% and 0.8%. Each quarter's growth doubled the predictions from the Office for Budget Responsibility (OBR) in March and independent forecasters.
Chancellor John Healey plans to raise defense spending to 3% of GDP by 2030. Healey also backs Lord Sadiq Khan's proposal to open Stratford International Station for cross-Channel rail services.
Prime Minister Burnham and Chancellor Healey's government implemented capped bus fares and a temporary VAT cut on household energy bills. Despite these measures, typical energy bills will rise by 16% in January.
Reforms to the electricity market weakened the link between gas and electricity prices. The Iran war proved more an oil shock than a gas shock.
London and the South East remain the sole net contributors to public finances. The Chancellor chose not to raise capital gains tax.
The Debt Management Office will publish the 'gilt remit', detailing changes to its plan to sell UK government bonds. Separately, 1.35 million people are off work due to mental health issues.
The Budget sees the chancellor present government plans for taxation, public spending, and the economy. Darren Jones, former Chief Secretary to the Treasury, lost his role when Andy Burnham became Prime Minister.